Permanent vs. Temporary Employees: Benefits and Disadvantages

By Indeed Editorial Team

Published April 5, 2021

When you apply for jobs, you might have the opportunity to choose between a temporary and a permanent role. Both options have advantages and disadvantages, so it's important to consider them carefully. Naturally, you need to understand what your employee status really entails so you can make the right choice for your career and your finances. In this article, we discuss permanent and temporary employees' benefits and explain the differences between the two.

What is a temporary employee?

A temporary employee has a job that lasts for a short, defined period of time. The time frame can be as brief as a few days or as long as a few weeks. In some cases, a temporary employee may even work as long as a couple of months, or the length of a season.

As a temporary employee, you have a few options for seeking short-term roles. Many employers hire temporary employees directly, so you can apply with the organization where you want to work.

In other cases, you might opt to work for a staffing agency that serves as a facilitator between temporary employees and organizations that need short-term help. If you choose this option, you may be able to secure more consistent short-term roles or access temporary worker benefits from your staffing agency.

Temporary employees have many reasons to take a short-term job. Some of the most common motives include:

  • You want to gain experience in the field or build a professional network by working a series of temporary roles.

  • You prefer the smaller time commitment that comes with a temporary job.

  • The position in question is available only as a temporary role, with no permanent employee option available.

  • You have experienced extended unemployment and have decided to take one or more temporary roles while searching for a permanent position.

Related: Everything You Need to Know About Being a Temp

Benefits of temporary employees

If you decide to apply for a short-term role, you could leverage a wide range of temporary workers' benefits. Some of the biggest benefits of temporary employment involve:

  • Maintaining a steady income stream: In some cases, you might choose to apply for a temporary role during a longer period of unemployment. A short-term job can ensure that you continue to earn money during your search for a permanent position.

  • Avoiding unnecessary resume gaps: If permanent roles are limited in your field, then a long period of unemployment could lead to resume gaps may turn away future employers. By taking a temporary job, you can secure consistent employment and demonstrate your hardworking and committed nature.

  • Changing career fields: If you want to transition to a different field, you may need relevant experience before applying for a permanent job. By working multiple temporary jobs, you may be able to gain sufficient experience or even make professional connections in the industry.

  • Transitioning to full-time roles: Some temporary jobs are designed as a short-term test for both the employee and the employer. Once the temporary period ends, both parties may agree to make the role permanent.

  • Accessing health care coverage: Do temps get benefits? It depends. Although many short-term or seasonal jobs don't provide medical insurance or paid time off, some do. If you rely on an employer to provide health care coverage, make sure the temporary employment benefits you receive are sufficient.

Related: What Is Seasonal Work? Definition, How It Works, Types and How to Get a Seasonal Job

What is a permanent employee?

A permanent employee has a long-term job without a predetermined ending date. In this role, you can work for the same organization for months, years or your entire career. As a permanent employee, you can work on either a full- or part-time basis.

Like temporary workers, permanent employees have many reasons for pursuing this type of role. Some of the most common motives include:

  • You want to leverage your work experience or connections in the industry.

  • You want to commit to a long-term position so you can plan your career.

  • You rely on your employer for a full range of health care and retirement benefits.

Related: Part-Time vs. Full-Time: Transitioning Between Them

Benefits of permanent employees

In most cases, the perks that permanent employees receive are much more substantial than the benefits of temporary workers. Permanent employees typically have these advantages:

  • Health care benefits: In many states, employers are required to provide health care coverage to full- or part-time employees. As a permanent employee, you can often extend coverage to your spouse or children, effectively protecting your family.

  • Retirement contributions: Some employers offer retirement benefits to permanent employees to help them save money for the future. Some even match employees' retirement contributions to amplify their savings.

  • Paid time off (PTO): Most permanent part- and full-time positions include a certain number of days off each year. With PTO, you can take a break or recover from an illness without worrying about missing a paycheck or getting fired from your job.

  • Long-term career planning: If you want to set and achieve career goals, becoming a permanent employee can help. In this type of role, you can gain experience, build connections and work consistently toward your career goals.

Differences between temporary vs. permanent employees

When it comes to temporary workers and benefits, it's important to understand how the legal implications differ for permanent employees. To pursue the right type of job and secure the employment status that works best for you, make sure you know these differences.

Payroll Taxes

Employers often handle payroll taxes for both temporary and permanent workers, but the conditions are slightly different. Organizations always handle payroll taxes when hiring permanent full- or part-time employees. In most cases, staffing agencies also manage payroll taxes for temporary employee. However, seasonal workers whom companies hire directly often have to pay taxes independently.

Hiring Fees

If you apply for a job directly, there are no hiring fees. However, if a recruiter seeks you out for a permanent role, your employer may owe them a fee. Staffing agencies often charge employers fees in the event that they opt to make a temporary employee permanent. However, if you get a temporary job directly with your employer, you may be able to pursue a full-time role without paying additional fees.

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